Young Londoners save for deposits by flatsharing

A record number of young Londoners are renting in groups to save money during the downturn.

The flatsharing population in London has soared by 13,690 to 635,950 since 2007, before the financial crash.

It costs £6,777 less a year on average to rent with four other people than it does to live alone in the capital when rent, council tax and household bills are taken into account, according to a flatsharing website.

Sharing with three others saves £6,652 a year, sharing with two others saves £6,302, and moving in with one other person saves £5,852.

It has become harder for first-time buyers to secure a mortgage during the credit crunch and property prices have rebounded, making it even less affordable to buy. As more Londoners are forced to rent for longer at a time when rents are rising, many have decided to share in order to save money for a deposit, Easyroommate.co.uk found.

Director Jonathan Moore said: "Since the credit crunch kicked in, more and more renters have had to dismiss the idea of not only buying, but also renting alone. Instead they are choosing to see out the economic slump — and the complete dearth of potential mortgage finance — in flatshares.

"In July alone, we saw 17 per cent more flatsharers join the site than the same time last year. And we expect this trend to continue as the imminent public sector spending cuts will hit renters' — and would-be buyers' —household finances.

"On top of drastically reducing the amount of cash they haemorrhage every year in rent, flatsharing allows renters to club together to meet the cost of bills, council tax and even food."

He added: "In the last three years, we've also seen a surge in the number of thirtysomethings who have had to rent out rooms following a pay-cut or redundancy."

The alternatives were a bit grotty'

Oliver Westray, 29, moved into a warehouse conversion in Shoreditch with three friends to save for a deposit on his first home.

The chartered surveyor pays £770 a month for rent and bills ­— about half of what comparable one-bedroom flats cost in the area.

Mr Westray said: "I'm happy because I'm living with friends in a lovely flat — exposed brickwork, New York style — and I have an ensuite bathroom. I have enough spare cash to have some fun and save £200 a month.

"If I'd tried to live on my own I would have scraped by having no fun or would have had to rent somewhere grotty or further away from my friends."